European Union: Shadow WTO agricultural domestic support notifications

"The notification of the level of domestic support to the World Trade Organization (WTO) is intended to reflect compliance with obligations entered into at the time of the Uruguay Round. WTO members have often been slow to provide notification of domestic support levels. This makes the process of notification less useful as an indicator of the degree to which changes in policy have or have not benefited the trade system as a whole and exporting countries in particular. The notification of domestic support in the E.U. illustrates the value of a measure that reflects current policies and can therefore act as a basis for negotiation of further disciplines where these are necessary. The E.U. has made major changes in its Common Agricultural Policy (CAP) over the period since 1992 when the MacSharry reforms were implemented. Payments originally notified in the blue box (related to supply control) have over time been changed until in their present form they are unrelated to current production or price levels, and hence can satisfy the criteria for the green box. The E.U. has therefore much more latitude in trade talks to agree to reductions in the allowable trade-distorting support. This paper reproduced the E.U. notifications relating to 2003/04 and extends these with official statistics to the year 2006/07. It then projects forward the components of domestic support until the year 2013/14, based on forecasts of future production and estimates of policy parameters. The impact of a successful Doha Round is simulated, showing that the constraints envisaged in the WTO draft modalities document of May 19, 2008, would be binding by the year 2013, at about the time the next budget cycle in the E.U. starts. Without the Doha Round constraints, further reform might still happen for domestic reasons, but the framework provided by the WTO for domestic policy spending would be less relevant. In that case, much could hinge on the legitimacy of the Single Farm Payment system under the current rules governing the green box." from authors' abstractAgricultural policies, WTO Doha round, WTO compliance, notification of domestic support, India agricultural support policies, Globalization, Markets, CAP,

El TLC y la agricultura: una revisión de las repercusiones económicas

Todos los comentaristas parecen estar de acuerdo en que la agricultura presenta problemas para los negociadores que tratan de concluir el Tratado de Libre Comercio de América del Norte (TLC). El grado de compromiso del gobierno en los mercados agrícolas asegura que serán difíciles las negociaciones para derribar las barreras al comercio. El libre comercio y la agricultura ocasionalmente coexisten en buenos términos y los problemas que enfrentan los negociadores son, de hecho, políticamente contenciosos. Pero, ¿cuán importantes serán las repercusiones económicas en los agricultores de Estados Unidos, México y Canadá si se lleva a cabo el TLC? Los datos de los estudios económicos del dominio público no son nada claros. El propósito de este artículo es explorar tanto la dirección como la dimensión de las repercusiones económicas que puede arrojar el componente agrícola del TLC y definir una posición de consenso.

Agriculture, Food and the TTIP: Possibilities and Pitfalls. CEPS Special Report No. 99/December 2014. TTIP Series No. 3 and Paper No. 1 in the CEPS-CTR project “TTIP in the balance’’

Progress in agriculture and food issues in the TTIP talks will largely be determined by the level of ambition in the negotiations as a whole. If ambitions are modest, a low-level agreement could probably be reached that includes some limited commitments on agricultural market access and food regulations. These could include promises of mutual support in the area of opening up agricultural markets through the WTO and of further Transatlantic cooperation in trying to resolve conflicts over food regulations. Bolder ambitions would allow more scope for tackling the difficult problems, though at the cost of time. It would be unfortunate if the opportunity were not taken to make some significant progress in removing some longstanding irritants in the area of agricultural policy and food regulations: this is where the economic gains are likely to be significant and the spill-overs useful. This paper argues the case that it is worthwhile making the effort to secure a constructive and imaginative agreement on agriculture and food regulations in the TTIP. A fairly detailed suggestive list of potential sub-deals in agro-food, supported by the analysis in the paper, is the most concrete one of a series of policy conclusion

Adding value to applied policy models: The case of the WTO and OECD support classification systems

Abstract Both the OECD and the WTO have accumulated systematic data on the magnitude of support going to farmers as a result of farm policies. The datasets are collected for different purposes but both give a detailed picture of the evolution of these policies. This paper extends recent work on the compatibility or otherwise of these two attempts at policy monitoring by considering the categorization of individual policy instruments in Norway, Switzerland, the US and the EU. The results show how the OECD data set, particularly with respect to the link between direct payments and production requirements, complements that of the WTO. Many payments classified as in the WTO Green Box require production, raising the possibility that they may not be in practice trade-neutral. Though the issue of correct notifications to the WTO is the province of lawyers the implications for modeling and policy analysis is of interest to economists. And the broader question of improving the consistency of the two datasets is of importance in the quest for transparency in the interpretation of changes in farm policy. JEL classification: C81, H50, Q17, Q1

Rule-Makers or Rule-Takers? Exploring the Transatlantic Trade and Investment Partnership

The Transatlantic Trade and Investment Partnership (TTIP) is an effort by the United States and the European Union to reposition themselves for a world of diffuse economic power and intensified global competition. It is a next-generation economic negotiation that breaks the mould of traditional trade agreements. At the heart of the ongoing talks is the question whether and in which areas the two major democratic actors in the global economy can address costly frictions generated by their deep commercial integration by aligning rules and other instruments. The aim is to reduce duplication in various ways in areas where levels of regulatory protection are equivalent as well as to foster wide-ranging regulatory cooperation and set a benchmark for high-quality global norms. In this volume, European and American experts explain the economic context of TTIP and its geopolitical implications, and then explore the challenges and consequences of US-EU negotiations across numerous sensitive areas, ranging from food safety and public procurement to economic and regulatory assessments of technical barriers to trade, automotive, chemicals, energy, services, investor-state dispute settlement mechanisms and regulatory cooperation. Their insights cut through the confusion and tremendous public controversies now swirling around TTIP, and help decision-makers understand how the United States and the European Union can remain rule-makers rather than rule-takers in a globalising world in which their relative influence is waning

Regulating biotechnology: comparing EU and US approaches. European Policy Papers #8

The United States and the European Union share a common desire to provide a safe food supply and credible regulatory systems. However, they have adopted two very different regulatory approaches to deal with the increasing numbers of GM (generically modified) food and feed products coming to market. Consequently, the transatlantic relationship has become fraught with conflict over the issue of GM foods. This paper explores the nature of the two regulatory systems and the underlying social, political, and institutional factors that contributed to the develoment of these systems. It then explores the potential impact of these two regulatory systems on international trade. We distinguish between producer protectionism, a commonly recognized trade impediment, and overprotection of consumers that can also have trade implications. Because the potential for trade conflicts over GM foods could result in serious consequences for both the transatlantic relationship and the multilateral system of trade rules, various attemps at bilateral and multilateral reconciliation have been made. Unfortunately, most of these attempts have stalled or failed. Finally, the paper explores product labeling as a possible solution to the conflict. We distinguish between positive and negative labeling and positive and negative attributes. The paper concludes that leaving the labeling to producers and retailers of food would allow the market to work effectively and could allow the EU and the US to reach consensus without resulting in major trade disruptions

"Options for Dealing with Agriculture in a Broader European Economic Area"

[From the Introduction[. The Common Agricultural Policy is once again in trouble. Weaker world markets have increased the cost of export subsidies at a time when price cuts and producer levies have proved unable to stem production. As a consequence, budget limits so painfully negotiated in 1988 are under pressure. The EC is being asked to show itself willing, in the GATT Uruguay Round, to curb the influence of the CAP on world markets, and to renegotiate the rules that govern such trade. A full response would effectively mean a major revision of the CAP instruments. Such a move is strongly resisted by those that benefit from the current policy. On top of these budgetary and trade woes of the CAP are the attacks from environmental groups who argue that it has encouraged environmentally offensive practices. All these have been the subject of extensive analysis in the past few years. No farm policy can ever have had so much of the attention of economists and politicians alike. As if these pressures were not enough, yet another threat to the CAP is on the horizon if anything more serious than those faced in the past. It may well be that the CAP will stand or fall in large part by how it reacts to this latest challenge

Comparative analysis of data frameworks for agricultural policy analysis. The WTO‐notifications and the OECD’s PSE database

Both the OECD and the WTO have accumulated systematic data on the magnitude of support going to farmers as a result of farm policies. The datasets are collected for different purposes but both give a detailed picture of the evolution of these policies. This paper extends recent work on the compatibility or otherwise of these two attempts at policy monitoring by considering the categorization of individual policy instruments in Norway, Switzerland, the US and the EU. The results show how the OECD data set, particularly with respect to the link between direct payments and production requirements, complements that of the WTO. Many payments classified as in the WTO Green Box require production, raising the possibility that they may not be trade‐neutral. Though the issue of correct notifications to the WTO is the province of lawyers the implications for modeling and policy analysis is more interesting to economists. And the broader question of improving the consistency of the two datasets is of importance in the quest for transparency.publishedVersio